Computer Sciences Corp. will expand the Canadian operations of its global outsourcing business with the construction of a software development centre in Montreal.

El Segundo, Calif.-based CSC, which often competes with rival

Electronic Data Systems (EDS) for major outsourcing projects, said the software lab will be complemented by a remote support centre, also in Montreal. The two facilities will create about 500 jobs in the next five years.

John Biggs, who was appointed president of CSC’s Canadian operation late last week, announced the expansion plans during the closing remarks of a breakfast seminar organized by the CIO Summit series of conferences Tuesday.

CSC has been operating in Canada since 1996 but has largely avoided the spotlight, Biggs said. “”We’ve tended to rely on word of mouth,”” he told the audience of both public and private sector chief information officers. The Montreal facilities, however, will raise its local profile. “”This is going to be our hub, supporting technical infrastructure for the North American region.””

Biggs said he was one of the principals involved in one of CSC’s most recent contract wins with Bombardier in November. Other Canadian customers include Pratt & Whitney, DuPont Canada and General Motors’ Locomotive Group.

Duncan Card, a lawyer with Ogilvy Renault and the presentation’s keynote speaker, discussed the legal pitfalls surrounding outsourcing contracts as detailed in his recent book, Information Technology Transactions. While there are enormous efficiency and cost gains to be made through outsourcing, Card said many enterprises don’t specify how and when decisions will get made once the outsourcer has taken over the IT operation. This can create conflicts when goals aren’t met and it becomes hard for either party to measure the results of their long-term partnership.

“”You’ll tell them they have to put in the metrics they currently use, and they’ll just stare at you. They don’t know,”” he said, adding that failure to spell details out in the contract often leads to litigation. “”If you don’t define it now, believe me, you’ll define it later.””

Biggs, a former CIO of Hyatt Hotels who moved over to CSC through an outsourcing agreement, agreed. “”It was a gut-wrenching experience,”” he said of the Hyatt deal, which was conceived in 1993 but did not officially begin for another two years. “”When we sent out the request for proposal, I was thinking about the job cuts. I thought that if some outsourcer could come up with a way to handle this stuff faster and cheaper, management was going to ask me what have we been doing for the last five years?””

The important thing for customers to remember is that you can’t outsource a problem, Biggs said. By the time it signed with CSC, it had already resolved many of its in